New Delhi: Former Prime Minister Manmohan Singh, expressing concern that growth would plunge after the notes ban, warned today that “the worst is yet to come.”
Addressing the Congress’ “Jan Vedna” conclave, Dr Singh also described the government’s decision to suddenly ban 500 and 1,000 rupee notes in November as a “disaster”.
“The beginning of the end has come,” commented the renowned economist, who was Prime Minister for 10 years.
In Gandhinagar, addressing the Vibrant Gujarat summit, Union Finance Minister Arun Jaitley dismissed the fears of slowdown. “Difficult decisions initially pass through difficult phases. Historic decisions have temporary pain attached to them,” the minister said.
“Excessive paper currency has its own vices, leads to its own temptations. We have seen its impact in India,” Mr Jaitley added.
Former Finance Minister P Chidambaram had earlier claimed that there was no record of the Cabinet meeting of November 8 when PM Modi announced the big move.
Dr Singh said after demonetization, “things are going from bad to worse and that the worst was yet to come”. He dismissed as a hollow claim that the situation has started looking up, and told Congress leaders it was their “solemn duty” to raise awareness on what he called “Modi’s propaganda”.
Both Dr Singh and Mr Chidambaram said there would be decline in the country’s GDP or Gross Domestic Product because of the notes ban, which wiped out 86 per cent of the cash in circulation.
The government and the central bank generally have differences but “never before has a government treated RBI like a department of the government of India,” remarked Mr Chidambaram.
He added that even one per cent decline in GDP will lead to a loss of Rs 1.5 lakh crore to the country.
The party issued a statement that the Prime Minister must reveal what percentage of the demonetised currency notes was black or untaxed money.
Dr Singh said: “Modi’s propaganda that the national income of India in the last two years has gone up has failed… The 7.6 per cent growth rate of country has come to 7 per cent in only a few months as a consequence of steep fall in the GDP of the country.”